To enable the States/UTs in augmenting human resources and developing capacity for critical activities Central Government provides up to 6 per cent of the total expenditure on MGNREGA in a FY as administrative expenses. This Central financial assistance is provided to States/ UTs under section 22 (1) (c) of the MGNREGA. State governments are advised to supplement this, if required, for effective implementation of the Provisions of MGNREGA.
The 6 per cent cap on administrative expenses operates at the State level and at least onethird of this 6 per cent should be utilised at the Gram Panchayat level to employ and pay the Gram Rozgar Sahayak, other technical personnel as per the work done and for other administrative expenses.
For accounting convenience, the administrative expenses portion may be kept in a separate bank account at State, district or block levels.